Why are altcoins negatively affecting the price of bitcoin?

Why are altcoins negatively affecting the price of bitcoin?

By World Crypto | World Crypto | 16 Sep 2020


Renowned investor and co-founder of 10T Holdings Dan Tapiero recently named a condition under which the price of Bitcoin could be significantly higher than it is now. According to him, the root of all evil lies in altcoins.

92cc164c44a0a15a1aea0e0c8f1db280d4f4a231ada363dec789db36fab69f88.jpeg

Many of them turned out to be either projects with no future, or outright fraudulent schemes. As a result, altcoins are mostly the cause of losses among investors, because, in addition, they pulled the blanket of attention from the first coin.

Bitcoin is the best

On his Twitter account, Tapiero shared a list of cryptocurrencies that have ever made it into the top ten of the digital asset rating by capitalization. They are compiled in the form of a table provided by Coingape. Pay attention to the yellow cells, which indicate already failed projects.

b2d877cccd130882758a3d2a2845ae789eacad848aa3ecbd4b14813a570365fe.jpeg

List of altcoins that have ever been in the top 10. Dead coins are marked in yellow

The most familiar of these is probably Bitconnect, a cryptocurrency pyramid that promised a bright future for its investors. However, in the end, everything turned out to be completely the opposite.

The investor believes that if altcoins did not divert so much attention to themselves, the capitalization and the rate of Bitcoin would now be much higher. Here is his line.

I'm surprised a lot of alts are still holding on to value, but imagine what it would be like if all this [investor attention] was focused on Bitcoin alone.

The assumption sounds logical. The listed coins had and still have millions of market caps, that is, representatives of the cryptocurrency industry have invested enough money in them. Of course, redirecting these funds to Bitcoin would seriously change the current situation with the rate of the first coin.

From the aforementioned list, projects such as Auroracoin, Paycoin, The DAO and Bitconnect ended in either failure or a fraudulent scheme. Of these, the last to exist in 2018 was the Bitconnect fraudulent project.

There are indeed a lot of “useless” altcoins in the cryptocurrency industry. They attract investors with the opportunity to make quick money due to the relatively high volatility. However, most often, altcoins with a low capitalization only bring losses and disappointment to newcomers to the industry who do not have time to exit the project in time and find themselves in the red.

A striking example of this is the popular DeFi project YAM a few weeks earlier, whose price collapsed in a matter of minutes due to a vulnerability discovered in the protocol. However, many of the participants in this experiment were satisfied with the situation, even despite the losses. Still, before in the industry, no one managed to create a community in such a short time frame and successfully coordinate it.

Dan's logic is clear, but don't be seriously upset about what is happening. Of course, fewer altcoins would most likely allow Bitcoin to be in a different situation, but they are the ones that give the cryptocurrency industry the diversity for which the latter is famous. In addition, a large number of blockchain projects create competition and force developers to move forward, which also has a positive effect on the industry.

So investors can imagine a possible Bitcoin exchange rate in case there are fewer alts, but it is worth stopping there. In addition, the first cryptocurrency still has a great chance to set a new price record - whenever that happens.

 

 

 





World Crypto
World Crypto

Analytics, regulation, latest news and not only in the world of cryptocurrencies!

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.